Hello guys,

1. If a developer or a real estate broker's name is on the list of RERA approved, does it mean it is totally safe to deal with them?

2. Would a developer only be approved by RERA if they have an ESCROW account? (i dont think if we can search separately for this on RERA)

Info appreciated

1. It depends on your definition of safety. Developer might complete the project but 6m later. Hence, if you depend on cash flow from the property to pay the mortgage you might be in trouble. Hence, what do you mean by safe?

By the way, why don't you contact RERA directly and ask what checks were done by RERA and what it actually means when developer is RERA approved? Is is financially sound? Do they have certified project managers? Do they insure projects during the construction process? Under which circumstances would RERA revoke approval? etc.

2. No. I am dealing with a developer at this very moment, they are approved by RERA but have no ESCROW account in place as of yet. I reckon a developer might have several ESCROW accounts one for each project. I am in the process of figuring this out for a planned purchase. Usually ESCROW would be provided by the bank which would provide financing to the developer.


Hope it helps.

[B][/b]How can we assess whether a particular project is really freehold or not? I tried to find out some info on dubailand and rera but in vain. Any suggestion!

Why don't you contact the developer and ask them for papers certifying the status of project?

RERA approval and ESCROW account number are two different things and are easily confused. Developers take advantage of that.

The best way to approach this is to ask the developer 2 things.

1) Pls give me your RERA approval number.

2 ) Pls give me your trust account number. Pls cross check if it's for that project.

As a test, let me send this to RERA and see whether they reply to this.

Regards

Roshan

Hi Mazi,

My understanding is that Rera and Escrow are 2 different things...being RERA does not automatically mean your money is held on trust as with an Escrow account.

p.s - anyone know when the law in RAK will catch up with that in Dubai as regards it being essential for developers to have an Escrow account?

Thanks - and have a nice day! :O)

I am not sure when this will be taking place in RAK - however some developers set up ESCROWs voluntarily to provide the necessary assurance to the investors which I think is a good thing

Dear All,

Only projects being sold off-plans are required to have an escrow account. The Escrow account is held by the trust bank and money that goes into the account will not be dispensed unless construction progress is maintained per approved programme to reach certain construction milestones.

The banks are currently 'supposidly' are checking the construction progress but that is a very very grey area.

Money that goes into the Escrow account for projects being sold off plans can come from the sales of units and/or any bridging loan obtained by the developer for the purpose of constructing the project and/or any capital funds by the developer budgeted for the purpose of constructing the project.

There are projects being sold off-plans that do not require Escrow account and they either have a full bank gurantee against its construction and/or are too advanced in the construction (over 60%) that it is in the best interest of the developer to complete the project.

Thus, the number of approved projects will always out-weigh the number of escrow accounts.

Now, there are still some developers who ignore the escrow rule (I believe even Emaar and Nakheel do or they are some how exempted) but it is absoulotly required by RERA and you can always call-into RERA and infor me them if you believe any dodgy business is going on.

Hope this helps,

Regards,

An Insider

Rera approved letter mentioned that developer has to open an escrow account with in 3 weeks from the date of approvel of project mentioned in that letter.

Developer has provided the bank details to transfer installments as below:

Escrow a/c "Project name" "developer name"

For example Escrow a/c Platinum tower abc co.


If I am transferring amount to this account, Is this not sufficient that I am transferring this amount in to Escrow account?

I thought this sufficient that Developer has Rera approved letter for particular project and Escrow a/c details as above.

Some body has some other thoughts about above case.

Dear Sgaur,

It sounds correct, cross check it on RERA's web-site to check the project number or better call the escrow account bank and check with them the account details relating to that particular project.

Each trust account bank now has a section head (I believe) that can answer particular questions about specific projects mainly relating to payments in and out of the account.

Hope this helps!

An Insider